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The   Railway  as  the 

Business   Mans 

Partner 


By    WILLIAM    WILSON    FINLEY 

President,  Southern  Railway  Company 


One  of  a  Series  of  Lectures  Especially  Prepared 
for   the    Alexander    Hamilton    Institute 


ALEXANDER    HAMILTON    INSTITUTE 
ASTOR  PLACE,  NEW  YORK  CITY,  U.  S.  A. 


WILLIAM    WILSON    FINLEY 


WILLIAM  WILSON  FINLEY. 

William  W.  Finley,  President  of  the  Southern  Railway, 
nnust  be  accounted  one  of  the  big  railroad  men  of  his  genera- 
tion. During  the  early  periods  of  his  career  he  was  able  to 
study  his  profession  in  its  many  aspects,  as  few  men  have 
had  the  opportunity  to  do,  as  he  served  various  roads  in 
widely  differing  capacities,  and  also  familiarized  himself 
with  conditions  in  several  of  the  most  important  sections  of 
the  country.  When  called  upon,  therefore,  to  assume  the 
duties  of  a  high  official  position  he  soon  demonstrated  his 
ability,  and  as  the  progressive  and  energetic  head  of  the 
largest  railroad  system  in  the  Southern  States  his  person- 
ality commands  attention. 

William  Wilson  Finley  was  born  on  September  2, 
1853,  in  the  little  village  of  Pass  Christian,  on  the  gulf 
coast  of  Mississippi.  This  town  is  one  of  the  oldest  in  the 
United  States,  having  been  settled  by  the  French  early  in 
the  seventeenth  century.  He  was  educated  in  private 
schools  at  Pass  Christian  and  grew  to  early  manhood  in  the 
atmosphere  of  this  picturesque  section  of  the  South.  At  the 
age  of  twenty  he  entered  the  service  of  the  old  New  Or- 
leans, Jackson  &  Great  Northern  and  the  Chicago,  St, 
Louis  &  New  Orleans  Railroads.  This  was  on  May  I, 
1873,  and  until  March  1,  1883,  he  loyally  stuck  to  this 
typical  pioneer  system,  which  was  in  a  chronic  state  of  bank- 
ruptcy. He  spent  three  years  as  stenographer  in  the  vice- 
president's  office,  nine  months  as  secretary  to  the  Receiver, 
one  year  as  secretary  to  the  agent  for  the  trustees,  four  years 
as  chief  clerk  of  the  general  freight  department,  and  three 
years  as  assistant  general  freight  agent.  In  these  positions  he 
gained  much  valuable  experience,  and  attracted  attention  in 
railroad  circles  as  a  young  man  of  promise. 

On  March  1 ,  1 883,  he  was  offered  and  accepted  the 
post  of  assistant  general  freight  agent  of  the  Texas  &  Pa- 
cific division  of  the  Missouri  Pacific  Railway,  which  he  held 
until  December  15,  1885.  From  the  latter  date  until  July, 
1  886,  he  was  assistant  general  freight  agent  for  the  receiver 
of  the  Texas  &  Pacific  Railway,  and  from  July,  1886,  to 
September  15,  1888,  general  freight  agent  of  the  same 
road.     From  September  15,  1888,  to  May,  1889,  he  was 


'n>  !^ 


general  freight  agent  of  the  "  Pan  Handle  Route,"  compris- 
ing the  Fort  Worth  &  Denver  City,  the  Denver,  Texas  & 
Fort  Worth,  and  the  Denver,  Texas  and  Gulf  Roads. 

In  May,  1 889,  Mr.  Finley  became  chairman  of  the 
Trans-Missouri  Traffic  Association,  with  headquarters  at 
Kansas  City,  Mo.  On  October  1 ,  1 890,  he  went  to  the 
Western  Passenger  Association  at  Chicago,  111.,  and  served 
until  May  20,  1892,  in  the  same  capacity.  From  May  23. 
1892,  until  April  10,  1895,  he  was  general  traffic  man- 
ager of  the  Great  Northern  and  the  Montana  Central  Rail- 
ways, and  from  April  10  to  October  1,  1895,  commis- 
sioner of  the  Southern  States  Passenger  Association  at  At- 
lanta, Ga. 

On  October  1,  1895,  Mr.  Finley  went  to  the  Southern 
Railway  as  third  vice-president.  It  will  be  seen  that  he 
had  received  a  thorough  training  before  he  entered  the 
service  of  the  road  with  which  he  was  to  make  a  lasting  rep- 
utation. From  May  15  until  September  15,  1896,  he  was 
second  vice-president  of  the  Great  Northern  Railway,  but 
on  the  latter  date  he  returned  to  the  Southern  Railway  as 
second  vice-president.  In  December,  1906,  he  was  elected 
president  of  the  Southern  Railway  Company,  succeeding  the 
late  Samuel  Spencer,  and  has  filled  this  place  vnth  marked 
distinction  ever  since. 

He  is  also  president  of  the  Southern  Railway  Company 
in  Mississippi,  the  Mobile  &  Ohio  Railroad  Company,  the 
Cincinnati,  New  Orleans  &  Texas  Pacific  Railway  Com- 
pany, the  Alabama  Great  Southern  Railroad  Company,  the 
Georgia  Southern  &  Florida  Railway  Company,  the  Vir- 
ginia &  Southwestern  Railway  Company,  and  the  Northern 
Alabama  Railway  Company.  He  is  also  a  director  of  the 
Chicago,  Indianapohs  &  Louisville  Railway  Company,  the 
Old  Dominion  Steamship  Company,  and  other  companies. 

On  March  3,  1910,  the  degree  of  LL.D.  was  conferred 
upon  Mr.  Finley  by  Tulane  University,  of  Louisiana,  and 
on  June  2,  1910,  the  same  degree  was  conferred  upon  him 
by  the  State  University  of  Kentucky. 

Mr.  Finley  is  widely  knowTi  as  a  student  of  transporta- 
tion problems.  He  is  a  fluent  and  convincing  speaker,  and 
his  addresses  delivered  in  various  sections  of  the  country 
have  done  much  toward  making  the  railroad  situation  clear 
to  the  public. 


The  Railway  as  the  Business  Man's 

Partner 

By  WILLIAM  WILSON  FINLEY 

The  railway  is  the  partner  of  the  modern 
business  man  in  a  very  real  sense.  Whether 
he  be  a  producer  or  a  distributer,  transporta- 
tion in  some  form  is  necessary  for  the  carrying 
on  of  his  business.  The  railway,  which  is  the 
most  efficient  and  economical  means  of  trans- 
portation by  land  that  has  yet  been^devised,  en- 
ters into  every  stage  of  business,  from  the  con- 
centration of  raw  materials  at  the  factory  to 
the  distribution  of  finished  products  to  whole- 
salers, retailers  and  to  final  consumers.  It  en- 
larges the  area  over  which  each  producer  and 
distributer  can  do  business.  Without  it,  or 
some  equally  efficient  means  of  transportation, 
the  producer  of  any  commodity  would  find  the 
area  from  which  he  could  draw  his  raw  ma- 
terials very  much  restricted  and  would  find 
his  business  confined  to  supplying  only  such 
an  amount  of  that  particular  commodity  as 
could  be  consumed  within  a  restricted  area. 
The  distributer  would  be  limited  to  selling  in 
a  narrowly  restricted  market  and  to  handling 
in  large  volume  only  such  articles  as  could 


advantageously  be  produced  in  his  neighbor- 
hood and  for  which  there  might  exist  a  large 
local  demand.  He  could  sell,  only  in  small 
quantities,  articles  produced  in  other  localities, 
the  selling  price  of  which  would  be  greatly 
enhanced  by  the  cost  of  their  transportation 
in  wagons  or  on  pack  animals. 


Commerce  Before  the  Railroad  Era 

It  was  the  partnership  between  transporta- 
tion and  all  kinds  of  business  which,  from  the 
dawn  of  history  to  the  development  of  a  prac- 
tical steam  locomotive  by  George  Stephenson, 
less  than  a  hundred  years  ago,  confined  the 
development  of  manufacturing  and  merchan- 
dising on  a  large  scale  principally  to  localities 
having  the  advantage  of  natural  or  artificial 
waterways.  The  seas,  the  lakes  and  the  navi- 
gable rivers  were  the  great  commercial  high- 
ways of  the  world.  Population  was  concen- 
trated in  proximity  to  the  waterways.  Inland 
regions  were  but  sparsely  peopled,  for  even 
agricultural  population  tended  to  concentra- 
tion in  areas  within  practical  wagon-haul  of 
the  cities  and  towns  on  the  waterways.  The 
relatively  few  people  in  localities  at  greater 
distances  from  water  transportation  labored 
under  substantial  economic  disadvantages 
owing  to  the  difficulty  of  marketing  what  they 
produced  and  of  obtaining  the  products  of 
other  regions.     Each  community,  and,  to  a 

6 


large  extent,  each  family,  produced  the  greater 
part  of  the  commodities  which  it  consumed. 
However  rich  such  an  inland  community 
might  have  been  in  natural  resources  and  in 
opportunities  for  agricultural  and  industrial 
development,  its  people  had  no  incentive  to 
make  use  of  their  advantages  beyond  the  point 
necessary  to  supply  their  own  needs.  The  scale 
of  living  in  such  localities  was  relatively  low. 
The  actual  necessaries  of  life  were  usually 
abundant,  though  generally  lacking  in  variety, 
but  even  the  most  wealthy  could  scarcely  ob- 
tain articles  which  are  now  in  almost  universal 
use,  and  which  have  come  to  be  regarded  as 
essential  to  comfortable  living,  even  by 
families  of  very  moderate  means. 


Rzdlways  Ejilarged  the  Earth 

To  a  limited  extent  canals  aided  in  interior 
development,  but  vast  regions  were  rendered 
capable  of  profitable  agricultural  and  indus- 
trial development  and  were  enabled  to  sup- 
port relatively  dense  populations  only  when 
the  economic  efficiency  of  the  railway  had 
been  established.  George  Stephenson  and  the 
great  army  of  men  who  have  followed  him  in 
the  construction  and  operation  of  the  railways 
of  the  world  may  be  said  to  have  enlarged  the 
earth,  economically  speaking,  for  they  have 
increased  many  fold  its  capacity  for  sustaining 
human  life. 


Transportation  Makes  Possible  Specialization 

Owing  to  differences  in  climate  and  to  the 
localization  of  supplies  of  minerals  and  other 
natural  resources,  certain  localities  have  ad- 
vantages for  the  production  of  certain  things, 
and  other  localities  have  advantages  for  the 
production  of  other  things.  Transportation 
makes  possible  the  specialization  of  industries. 
It  enables  the  people  of  each  locality  to  de- 
vote their  energies  chiefly  to  producing  those 
things  for  which  they  possess  superior  advan- 
tages. They  can  produce  these  commodities 
in  much  larger  volume  than  is  necessary  to 
supply  the  local  demand,  selling  their  surplus 
in  the  markets  of  the  world,  and  supplying 
their  needs  for  other  commodities  from  the 
surplus  production  of  other  localities.  This 
may  be  made  clear  by  an  illustration. 

Natural  advantages  have  made  Pittsburg  a 
great  center  of  iron  and  steel  production,  and, 
upon  the  foundation  of  this  primary  industry, 
there  have  been  built  up  a  great  variety  of 
secondary  industries  which  use  iron  and  steel 
as  their  raw  materials.  If  the  manufacturers 
of  the  Pittsburg  district  had  been  restricted 
to  the  markets  of  their  immediate  neighbor- 
hood, supplemented  only  by  such  as  they 
could  reach  by  wagon-haul  and  water  trans- 
portation, their  iron  and  steel  industry  and 
their  many  secondary  industries  would  be 
small  indeed  as  compared  with  their  present 
proportions.     The  railway  has  been  the  active 

8 


partner  that  has  made  the  present  day  Pitts- 
burg district  possible.  It  lends  a  helping  hand 
at  ever};^  stage  of  the  iron  and  steel  industry 
from  carrying  ore,  lime,  coal  and  coke  to  the 
furnace  to  hauling  to  market  the  finished  pro- 
ducts in  all  their  forms,  from  the  structural 
material  for  a  great  steel  building  to  a  cambric 
needle  or  the  hair-spring  of  a  watch.  By  col- 
lecting and  carrying  into  the  markets  of  Pitts- 
burg the  products  of  other  localities  in  the 
United  States  and  foreign  countries,  it  enables 
the  people  of  that  district  to  concentrate  their 
energies  upon  their  own  great  industries. 

Such  illustrations  might  be  multiplied  in- 
definitely, and  it  could  be  shown  that  the  rail- 
way is  directly  or  indirectl}^  the  partner  of 
every  individual  except  those,  if  there  be  any 
such  in  any  civilized  country,  who  are  self- 
supporting  in  the  narrowest  sense  of  the  word, 
using  no  foods,  clothing,  furniture,  or  imple- 
ments except  such  as  they  or  others  living  in 
the  same  way  in  their  neighborhood  produce, 
and  who  aid  in  the  production  of  nothing  that 
is  to  be  carried  out  of  their  locality. 

The  Railway  and  Its  Territory  Are  Partners 

Partnership  implies  working  together  for  a 
common  end.  The  owners  of  each  individual 
enterprise  in  a  community  along  the  line  of  a 
railway,  whether  it  be  a  farm,  a  factory,  a 
mine,  or  a  mercantile  establishment,  are  all 
working  for  the  development  and  prosperity 


of  their  individual  business  enterprises.  The 
sum  of  their  achievements  represents  the  ad- 
vance of  the  community  as  a  whole,  and  each 
one  of  them  may  be  said,  therefore,  to  be 
working  for  the  benefit  of  the  community, 
even  though  he  may  contribute  nothing  to 
public-spirited  movements.  Intelligent  self- 
interest  impels  the  railway  to  be  an  active 
partner  in  this  work  of  community  develop- 
ment. The  volume  of  its  business  is  abso- 
lutely dependent  upon  the  demand  of  the 
communities  along  its  lines  for  transportation 
service.  It  follows  that  the  business  of  a  rail- 
way can  be  increased  only  as  this  demand  for 
transportation  service  increases.  Hence,  we 
find  the  railways  of  the  United  States  gener- 
ally working,  through  land  and  industrial  de- 
partments and  various  kinds  of  advertising, 
to  aid  the  development  of  the  territory  which 
they  traverse. 

The  Law  of  Increasing  Returns 

The  work  of  the  railways  in  this  direction 
is  based  on  sound  business  principles,  for  the 
reason  that  the  business  of  transportation  by 
rail  is  subject  to  the  economic  law  known  as 
the  law  of  increasing  returns.  Under  the 
operation  of  this  law,  so  long  as  the  volume 
of  traffic  is  not  so  great  as  to  tax  the  facilities 
of  the  railways  beyond  their  capacity  for  eco- 
nomical operation,  each  increase  in  that  vol- 
ume results  in  a  decrease  in  the  unit  cost  of 
operation. 

lO 


This  grows  out  of  the  fact  that,  as  the 
volume  of  business  handled  by  a  railway  in- 
creases, its  expenses  do  not  ordinarily  increase 
in  the  same  ratio.  A  certain  proportion  of  the 
expenses  of  a  railway,  including  its  fixed 
charges,  taxes  and,  to  a  large  extent,  its  gen- 
eral expenses,  bear  practically  no  relation  to 
the  volume  of  business  handled. 

Expenditures  for  maintenance  of  roadway 
and  structures  are,  to  a  certain  extent,  de- 
pendent upon  the  volume  of  business,  but,  if 
the  railway  is  to  be  operated  at  all,  a  very 
considerable  proportion  of  them  must  be  made 
whether  the  business  is  heavy  or  light.  Ex- 
penditures for  maintenance  of  equipment  are 
affected  to  a  much  larger  extent  by  fluctua- 
tions in  the  volume  of  business,  but  a  certain 
proportion  of  these  are  due  to  deterioration 
which  would  go  on  whether  the  equipment  was 
in  use  or  was  standing  idle  on  side-tracks. 
Practically  the  only  expense  which  may  be 
said  to  vary  directly  with  fluctuations  in  the 
volume  of  business  are  those  for  conducting 
transportation.  It  will  be  seen,  therefore, 
that,  so  long  as  the  aggregate  volume  of  traffic 
is  not  so  large  as  to  tax  the  facilities  of  the 
railway  beyond  the  point  of  economical  opera- 
tion, an  increase  in  the  volume  of  business 
does  not  bring  about  a  proportionate  increase 
in  the  total  cost  of  maintaining  and  operating 
the  property. 


II 


Filled  Seats  Cost  No  More  Than  Empty  Seats 

This  may  be  illustrated  by  referring  to  the 
passenger  business.  On  some  lines  of  railway, 
in  the  more  densely  settled  parts  of  the 
country,  the  volume  of  passenger  traffic  is  so 
heavy  and  regular  that  the  railways  can  count 
on  having  many  of  their  trains  filled  to  their 
capacity  on  every  trip.  This  is  particularly 
true  of  suburban  traffic  and  passenger  busi- 
ness between  large  cities.  Even  on  such  rail- 
ways, however,  there  are  many  passenger 
trains  which  must  be  run  to  accommodate  the 
public  even  though  they  may  carry  very  few 
passengers.  On  railways  in  more  sparsely  set- 
tled regions  a  passenger  train  loaded  to  its 
capacity  is  the  exception,  and  the  average 
number  of  passengers  per  train  may  be  rela- 
tively small.  It  costs  the  railway  practically 
as  much  to  haul  a  passenger  train  over  its  road 
with  all  of  the  seats  empty  as  with  them  filled. 
It  is  apparent,  therefore,  that  if  by  aiding  in 
the  development  of  its  territory  a  railway  can 
make  any  addition  whatever  to  the  average 
number  of  passengers  carried  in  its  trains,  the 
result  is  to  decrease  the  expense  of  carrying 
each  passenger  and  make  a  corresponding 
addition  to  its  net  revenue. 

Advantage  of  Traffic  Density 

In  the  same  way,  ideal  conditions  affecting 
the  movement  of  freight  on  a  railway  would 
consist  in  having  each  freight  car  loaded  to 

12 


its  capacity  and  having  each  freight  train 
made  up  of  these  loaded  cars  to  the  Hmit 
prescribed  by  the  tractive  power  of  the  loco- 
motives in  use  and  the  maximum  grade  to  be 
encountered.  Under  these  ideal  conditions, 
there  would  be  no  movement  of  empty  freight 
cars,  but  each  car,  on  being  unloaded,  would 
be  able  to  obtain  a  return  load  at  the  same 
point.  Such  ideal  conditions  are  impossible 
of  attainment,  but  railway  managements  are 
constantly  striving  to  approximate  them  as 
nearly  as  possible. 

Especially  in  local  freight  train  service, 
trains  must  be  operated  that  are  far  below 
the  tractive  power  of  locomotives,  and,  as 
freight  must  be  loaded  and  unloaded  at  each 
station,  it  is  impracticable  to  load  the  cars  in 
such  a  train  to  their  capacity.  It  is  apparent 
that  the  average  loading  of  local  freight  trains 
could  be  very  substantially  increased  without 
materially  increasing  the  cost  of  their  opera- 
tion. Through  freight  as  a  rule  is  handled 
more  economically.  Cars  can  more  generally 
be  loaded  to  their  capacity,  and,  under  some 
conditions,  solid  train  loads  can  be  hauled  for 
long  distances.  But,  even  in  the  through 
freight  business  on  main  lines,  the  traffic  is 
generally  heavier  in  one  direction  than  in  the 
other,  necessitating  more  or  less  movement  of 
empty  cars.  It  is  the  aim  of  the  management 
of  a  railway,  therefore,  to  co-operate  with  the 
communities  on  all  parts  of  its  lines  for  the 
development  of  a  greater  density  of  traffic  and 

13 


with  a  view  to  building  up,  as  nearly  as  pos- 
sible, an  equal  volume  of  traffic  in  both  direc- 
tions, so  as  to  reduce  the  percentage  of  empty 
car  mileage  to  a  minimum. 

It  will  be  seen,  therefore,  that  the  railway, 
in  its  partnership  with  the  business  man,  has 
a  direct  and  vital  interest  in  his  prosperity, 
for,  unless  the  volume  of  its  traffic  is  sufficient 
to  tax  its  facilities  to  the  limit  of  economical 
operation,  each  additional  unit  of  traffic  which 
the  business  man  can  give  to  the  railway  to  be 
handled  at  remunerative  rates  adds  to  the  net 
income. 

The  Guiding  Principle  of  Traiffic  Officers 

This  co-operation  of  the  railways  is  not 
limited  to  aiding  in  securing  the  location  of 
additional  inhabitants  and  industries.  It  goes 
farther,  and  the  railway  is  an  active  ally  of 
the  business  man  in  his  efforts  to  extend  his 
markets.  This  is  reflected  in  the  freight  rates 
of  the  American  railways,  which  are  lower 
than  those  of  any  other  country,  notwith- 
standing the  much  higher  rates  of  pay  of 
American  railway  employees.  This  has  been 
brought  about  largely  by  the  efforts  of  Ameri- 
can railway  managers  to  enlarge  the  markets 
of  producers  on  their  lines.  A  guiding  prin- 
ciple of  traffic  officers  is  to  make  rates  to  move 
the  traffic.  The  traffic  officer  endeavors  so  to 
adjust  his  rates  as  to  secure  the  best  net  re- 
sults from  the  entire  volume  of  traffic,  but  he 
can  consider  neither  the  capitalization  of  his 

14 


company  nor  the  value  of  its  property  as  a 
controlling  factor  in  rate  making.  His  dis- 
cretion is  confined  within  very  narrow  limits 
by  competitive  forces  beyond  his  control  and 
by  the  necessity  of  making  rates  that  will 
move  the  traffic  under  the  competitive  market 
conditions  which  the  business  men  on  his  line 
must  meet. 

The  Business  Man  $  Interest  in  Railway  Prosperity 

Partnership  implies  not  only  working  to- 
gether for  a  common  end  but  also  mutuality 
of  interest.  Each  partner  is  interested  not 
only  in  the  success  of  all  the  partnership 
undertakings,  but  he  is  interested  in  the  in- 
dividual success  of  each  of  his  partners.  I 
have  shown  that,  in  the  partnership  between 
the  railway  and  the  business  man,  the  railway 
is  interested  in  the  prosperity  of  the  business 
man.  The  latter  is  no  less  interested  in  the 
prosperity  of  the  railway. 

We  have  seen  that,  in  our  modem  civiliza- 
tion, transportation  is  directly  or  indirectly  a 
factor  in  all  business,  and  that,  without  effec- 
tive agencies  for  the  concentration  of  raw  ma- 
terials and  the  distribution  of  finished  pro- 
ducts, business  opportunities  would  be  very 
greatly  restricted.  It  follows  that  the  pri- 
mary interest  of  the  business  man  in  the  rail- 
way is  in  adequacy  of  facilities  and  efficiency 
of  operation.  If  he  is  doing  business  in  a 
community,  the  railway  facilities  of  which  are 
sufficient  to  handle  only  eighty  or  ninety  per 

15 


cent,  of  the  business  output  of  the  community, 
his  operations  are  correspondingly  restricted. 
He  can  hope  to  maintain  and  increase  the 
volume  of  his  business  only  if  the  railways  are 
able  to  provide  additional  carrying  capacity. 
The  ability  of  the  railways  to  do  this  is  di- 
rectly dependent  upon  their  credit,  which  in 
turn  must  be  supported  by  a  sufficient  margin 
of  net  income  over  the  costs  of  operation  to 
attract  capital  to  investment  in  railway 
enterprises. 

The  Limits  of  Governmental  Regulation 

As  a  railway  is  a  public  highway,  it  is  a 
proper  function  of  the  government  to  protect 
all  travelers  and  shippers  from  undue  dis- 
criminations in  charges  or  in  service  when 
the  service  is  performed  under  substantially 
similar  circumstances  and  conditions.  As  the 
operating  company  must  exercise  a  monopoly 
of  transportation  over  this  highway,  it  is  a 
proper  function  of  the  government  to  prevent 
unreasonable  or  extortionate  charges  for  the 
service  performed. 

Neither  as  a  matter  of  sound  economics  nor 
of  sound  public  policy  can  governmental  regu- 
lation of  the  railways  be  carried  beyond  these 
limits,  and  it  is  to  the  interest  of  the  business 
man  that  it  should  not  be.  It  is  to  his  inter- 
est that  the  railway  should  receive  just  and 
reasonable  compensation  for  each  specific  serv- 
ice which  it  performs,  as  it  is  only  in  this  way 
that  railway  credit  can  be  maintained  and 

i6 


adequate  facilities  be  provided.  It  is,  I  be- 
lieve, a  property  right  in  which  a  privately 
owned  railway  is  protected  by  the  Constitu- 
tion of  the  United  States  to  receive  just  and 
reasonable  compensation  for  each  specific  serv- 
ice performed,  and  I  believe  that  it  is  to  the 
ultimate  interest  of  the  business  man  that  the 
railways  should  be  protected  in  this  right 
rather  than  that  by  the  exercise  of  govern- 
mental authority  their  revenues  should  be  so 
reduced  as  to  restrict  the  value  of  capital  in 
railway  enterprises. 

Prosperity  and  Railroad  Progress 

The  business  man  has  still  another  interest 
in  the  prosperity  of  his  railway  partner.  There 
are  on  the  pay-rolls  of  the  railways  of  the 
United  States  more  than  a  million  and  a  half 
of  employees.  The  purchasing  power  of  each 
member  of  this  vast  army  is  dependent  upon 
the  maintenance  of  the  wage-paying  power  of 
the  railways.  The  money  received  by  railway 
employees  finds  its  wa}^  through  all  the  chan- 
nels of  trade  and  is  a  factor  of  local  business 
importance  in  practically  every  community  in 
the  United  States.  The  railw^ays  are  also  large 
purchasers  of  the  products  of  industries  which 
in  turn  support  another  vast  army  of  em- 
ployees. Through  these  channels,  the  bene- 
fits of  the  maintenance  of  wage-paying  and 
purchasing  power  are  so  widely  distributed  as 
to  reach  directly  or  indirectly  practically  every 

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individual  in  the  United  States,  whatever  may 
be  his  business  or  occupation.  This  interest 
of  the  business  man  in  the  railways  was  very 
well  expressed  in  an  address  by  one  of  the 
most  prominent  merchants  of  the  United 
States,  in  which  he  said: 

"Let  any  merchant  look  over  his  records 
for  years;  let  him  note  the  fat  years  and  the 
lean  years;  let  him  then  mark  the  years  of 
railroad  extension  and  railroad  improvements 
— of  railroad  spending.  Let  him  mark  on  the 
other  side  the  years  of  railroad  retrenchment, 
and  he  will  find  that  the  years  when  his  pros- 
perity has  waned  have  been  the  years  when 
the  railroads  were  not  progressing." 


18 


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3  0112  072423046 


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